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Drug Watch: E-Therapeutics raises £40m

DRUG WATCH: eTherapeutics creates a buzz around its development programme
February 13, 2013

E-therapeutics (ETX) secured its funding needs for the next four years after the biotech secured a notable £40m fundraising. The proceeds from the raising will boost the company's cash resources to £48m, more than its current market capitalisation. E-Therapeutics' ability to raise money, particularly with heavyweight backing from Invesco, was noted two years ago when it first raised £17m in a tight market. But the difference this time is that e-Therapeutics is taking a much clearer view about what sort of products it wants to develop.

IC TIP: Hold

The company is pinning its hopes on a future licensing deal for its lead cancer drug, ETS2101. To achieve this, e-Therapeutics plans to spend £25m of the money it has raised to complete phase I trials and then move straight into phase II clinical trials. The high cost is fairly normal for complex trials in cancer, especially in a very hard-to-treat condition such as brain cancer (glioma), which is ETS2101's primary target. The attraction of trying to treat glioma is that it would qualify for fast-track approval from the FDA, given the high mortality rates and low number of products on the market to treat it.

Getting the product to patients will definitely require a partner with the right expertise and deep pockets, as brain cancer drugs have an unhappy history in the UK biotech world. For example, Ark Therapeutics tried to go it alone by financing the late-stage development of Cerepro, which subsequently failed its phase III trials, diminishing Ark's status to an irrelevance, as a result. Therefore, e-Therapeutics will need some kind of insurance, which is why it is funding studies into six other potential indications for ETS2101 in other types of cancer.

The new cash injection gives e-Therapeutics enough resources to fully fund its development programme until 2017, by which time it is hoped that enough positive data will have been generated to interest a potential partner. At the same time, the company will continue with initial work on its ETX1153c product to treat c-difficile infections, as well as starting a phase IIb trial to measure doses for its depression drug, ETS6103, which is due to report in mid-2014.